Layer III: Aggregator
Aggregators are relatively new and not many exist at this point but that is likely to change over time. One of the first and most famous aggregators is 1Inch. 1Inch defines itself as such:
Due to their decentralized and permissionless nature, decentralized exchanges (DEXes) β€” and especially automated market makers (AMMs) β€” have become extremely popular over the past year or so. As a leading DEX aggregating service, the 1inch Network has changed the industry with its unprecedented technology.
DEXes used to be fragmented, making the process of finding the best rate for a given trade incredibly complex. Moreover, large trades in a single liquidity pool can lead to higher slippage rates.
Acting as sort of a search engine for trading, the 1inch Aggregation Protocol can check prices across all DEXes and ensure users are always given the best rate for a swap. A single trade can also be split over different DEX liquidity pools, further optimizing the process. (Source)
Therefore, Aggregators aim to utilize existing products and services within DeFi to provide new services. These products either create greater efficiency, reduce cost, enhance yields, or manage risks.
Last modified 3mo ago
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